Beijing's Behavior Tests Resolve of US To Apply Sanctions

SINCE the founding of the Republic - with rare exceptions - American presidents have put foreign trade above other strategic interests. Now China is putting that historic truism to one of its toughest tests.

Over the past two years China has sold nuclear technology to Pakistan, sent missiles to Iran, pirated US intellectual property, ignored demands to improve its human-rights record, and threatened Taiwan, one of the United States's most important trading partners.

But Mr. Clinton has hesitated to respond with punitive sanctions. China represents one of the world's most promising markets. US companies have pumped more than $20 billion into the country since 1990, building factories and offices. Given the link between markets abroad and jobs at home, some analysts say, restraint may be the only real option the president has.

"American economic and diplomatic interests have usually gone hand-in-hand," says University of Connecticut diplomatic historian Thomas Paterson.

But Clinton is feeling pressure. China's most-favored-nation trade status is up for renewal in June, and administration officials will face stiff opposition from Sen. Jesse Helms (R) of North Carolina and other members of Congress upset over China's recent behavior.

One possible solution for the Clinton administration: targeted sanctions against particular Chinese companies, such as the firm suspected of aiding Pakistan's nuclear program. "Renewal of mostfavored-nation trade status does not mean you are not going to take strong and aggressive action in a particular area," Commerce Secretary Ron Brown said recently.

In recent decades, economic as well as strategic considerations prompted the US to keep trade lines open to dictators from the Philippines to the Dominican Republic. Criticism of political corruption in Mexico, to choose another example, has been muted because of its evolving economic partnership with the US.

In China, where rapid economic growth and a huge middle-class market have drawn hundreds of billions in foreign investment, the risks of punishing Beijing for human-rights violations and illegal arms sales are inordinately high.

Number of US jobs tied to China

US trade with China supports more than 200,000 American jobs plus additional employment in US ports, retail establishments, and consumer goods companies, according to the Business Coalition for US-China Trade, an association lobbying to keep Congress from revoking China's most-favored-nation trade status.

In a rare recent exception to the rule that business considerations take precedence in foreign policy-making, Congress and the administration agreed to tighten sanctions on Cuba over the objections of US businesses. They complain that the US policy of isolating Cuba has kept them out of an opening multimillion-dollar market that companies from other nations are now cashing in on.

The difference has been the Cuban-American lobby, whose political clout has served to offset the influence of the US business community.

"Where you find this kind of domestic political power, it can force a break in the cooperation between the government and the business community," notes Cornell University diplomatic historian Walter LaFeber. "Human-rights and arms-control groups have had much less luck doing this."

Other recent exceptions have included Iran and Libya, whose sponsorship of terrorism has prompted the executive branch to close ranks with Congress in favor of sanctions, not only to bar US investment but to penalize foreign companies doing business in the two pariah states.

US foreign policy has been put to the service of US commercial interests since the beginning of the Republic. The nation was barely formed when the State Department sought to reopen trade with the British West Indies, which was suspended during the Revolutionary War.

Half a century later, Commodore Matthew Perry pried open the door to Japan, arguing that a strong Navy was needed to promote US trade. Since the 1780s, US diplomats have helped American firms gain a foothold in China, then and now the world's largest potential consumer market.

"Asia has suddenly become our neighbor, with a placid intervening ocean inviting our steamships upon the track of a commerce greater than that of all Europe combined," one Congressman enthused in 1848.

In their pursuit of overseas markets, government and business have usually had compatible goals. US strategic and economic interests converged perfectly, for example, when the US sought to free the Caribbean of European intervention during the early years of the 20th century

But US businesses have not always found it convenient to support US diplomatic objectives. During the Cold War, US companies found innovative ways to circumvent State Department and Pentagon restrictions on the sale of strategic goods to the Soviet Union and China.

Critics attribute such behavior to what scholar Richard Barnet of the Institute for Policy Studies in Washington calls "a relaxed view of patriotism" on the part of multinational corporations that puts corporate interests ahead of national interests. Spokesmen for US firms deny the charge, saying, in effect, that what's good for US business is good for the US economy and for the economy of the foreign nations involved.

Why no sanctions on Nigeria

Like Nigeria, for example. The Clinton administration has contemplated sanctions against the West African nation, including a ban on new investment, to force democratic and human-rights reforms. But the idea of an embargo is steadfastly resisted by US companies, which have close to $5 billion invested there. The companies insist US investment contributes to economic growth, which indirectly contributes to democracy-building and even improved human rights in Nigeria. The more compelling reason is that if sanctions are imposed, foreign companies will fill the breach and US investment - and jobs - will dry up. "This will send US jobs to Europe and Japan," says David Miller of the Corporate Council on Africa.